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Poundland owner reveals soaring supply chain costs

·2-min read

The owners of Poundland have said the discount retailer has seen shipping costs rise tenfold due to global supply chain issues.

Andy Bond, chief executive of PepCo, which also runs Dealz stores across Europe, said the retailer has enough stock to keep shelves full although he admitted price pressures are being felt.

He told the PA news agency he did not expect the pressures to ease for at least a year.

Mr Bond said: “The biggest challenge that retailers face at the moment is global supply chains.

(Pepco/PA)
(Pepco/PA)

“If retailers didn’t invest and pay what was necessary to ship goods there could be issues.

“We’ve invested in making sure we have availability so I’m very confident we will have a good Christmas and good year.”

The boss, who previously ran Asda, added: “You get seasonal peaks at Christmas which further exacerbates the cost issue because you’re out there buying extra vessels than you normally would.

“There are some times where we have had to pay 10 times our normal rates. That’s not to say every day but that has been the impact.”

He said costs will not be passed on to customers in higher prices for the vast majority of products and items will still reach shelves.

Mr Bond added: “We enter Christmas with good inventory levels.

“Our inventory levels in the store today are what they were last year, with strong inventory continuing to come in over the next number of weeks. So if anything our inventory will be higher this year than last.

“I think that we see the next 12 months remaining challenging but we feel we’re set for another good year.”

The comments come as the company revealed like-for-like sales at Poundland, which also include its international Dealz business, were up 3.1%, with strong figures in clothing and homewares.

Poundland also benefited from the introduction of new frozen and chilled food to 35 stores in the past three months.

Underlying pre-tax profits are expected to be between 640 million and 655 million euros (£542 million and £554 million) for the group, helped by 424 net new store openings, including 60 Poundland and Dealz sites.

The company is also incorporating Fultons, which it bought last year.

Mr Bond added he believed the supply chain issues would remain challenging for the next 12 months.

At Poundland stores in the UK, the company introduced its 400th Pep&Co clothing offer inside existing stores, making it one of the fastest growing clothing retailers in the country.

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